Shining a Light on Blowing the Whistle

In what seemed to be a fairly easy decision for the Justices, the U.S. Supreme Court in Digital Realty Trust Inc. v. Somers ruled on February 20, 2018, that Dodd-Frank’s anti-retaliation provisions, including protections for whistleblowers, do not extend to individuals failing to report violations of securities laws to the SEC. The Court relied on the plain meaning of the term “whistleblower” in the statute, which states that a whistleblower is an individual who provides information relating to a violation of the securities laws to the SEC. In doing so, the Court followed a straightforward principle: when a statute includes an explicit definition, the courts must follow that definition. While the decision seems common sense, Nilan Johnson Lewis labor and employment attorney Jeremy Robb says the Court took the case to resolve a split between the Fifth and Ninth Circuit, the latter of which had evaded the definition. “The Court’s decision is on all fours with Dodd-Frank’s intended purpose to motivate people who know of securities law violations to actually tell the SEC,” said Robb. “Employers will find the decision beneficial because it significantly narrows the definition of ‘whistleblower’ under the Dodd-Frank Act. However, employers should continue to take employees’ reports seriously regardless of whether they’ve informed the SEC, as other federal laws (e.g., Sarbanes-Oxley) and state laws don’t require employees to report SEC violations.” To discussthe importance and implications of this decision, contact Mr. Robb at jrobb@nilanjohnson.com or 612.305.7716. Media interviews can be arranged through Aaron Berstler at aaron@kohnstamm.com or 651.789.1264.